Political economy of IPO underpricing: the evidence from China

Chen, Jian and Strange, Roger (2012) Political economy of IPO underpricing: the evidence from China. Journal of Chinese Economic and Business Studies, 10 (2). pp. 111-129. ISSN 1476-5284

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Abstract

This paper looks at the IPO underpricing puzzle in a political economy perspective, as previous theories have considered only the ‘market economy factor’ in IPO underpricing, and failed to incorporate the ‘political economy factor’ in determining IPO underpricing. This is particularly relevant to emerging markets such as China, where the IPO is not only a process of raising fresh capital, but also one of privatisation. By examining the Chinese case with the political economy perspective, we find that the IPO underpricing is negatively related to the proportion of the shares held by various government organisations. We also offer explanations using an angle of political economy

Item Type: Article
Keywords: political economy, initial public offering, privatisation
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences
Depositing User: Janet Snow
Date Deposited: 10 Jul 2012 09:23
Last Modified: 10 Jul 2012 09:23
URI: http://sro.sussex.ac.uk/id/eprint/40116
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